We are evaluating the effects of prednisolone versus placebo therapy in a randomized double blind trial of patients with alcoholic hepatitis. Patients are grouped in three broad categories depending on initial and histologic assessment. Moderately ill group with abdominal pain, hepatomegaly, jaundice and fever; more severely ill with above signs and symptoms and in addition ascites and/or hepatic encephalopathy; severely ill with clotting abnormalities preventing liver biopsy. All patients are hospitalized for five weeks. Assessments are made of mortality, overall morbidity, and incidence of side effects (infection, bleeding, diabetes). All patients have liver biopsies before and after the therapeutic trial. The biopsies are evaluated for presence of Mallory bodies, polymorphonuclear infiltration and cell necrosis. Before and after therapy we assess: 1) liver function tests; 2) wedged hepatic venous pressure and both wedged and free hepatic venograms; 3) plasma volume by I125 albumin; 4) BSP storage and maximal excretory rate; 5) fibrogenesis by determination of protocollagen proline hydroxylase on liver biopsy specimen and urinary hydroxyproline excretion.